A curious whisper has been making the rounds in crypto circles, suggesting a major market maker, Wintermute, might be preparing to take the world’s largest exchange, Binance, to court. It’s the kind of rumor that sends shivers down the spine of anyone who remembers the market turmoil of 2022.
- Wintermute CEO Evgeny Gaevoy has denied rumors that his firm plans to sue Binance, calling the accusations “complete bullshit.”
- These rumors emerged following a significant market crash on October 10th, which saw over $20 billion in leveraged crypto positions liquidated.
- While Wintermute experienced “very strange” liquidations at “ridiculous prices,” Gaevoy maintains the firm is “perfectly fine” and has no intention of legal action against Binance.
But Evgeny Gaevoy, the founder and CEO of Wintermute, has stepped forward to set the record straight. He says such talk is simply not true. He made it clear his firm has no plans to sue Binance, now or in the future.
The October Crash and Lingering Doubts
This whole situation stems from the wild market crash we saw on October 10. That day, over $20 billion in leveraged crypto positions evaporated. It was a historic drawdown, leaving many traders and firms reeling.
When you see that kind of market event, people naturally start looking for who might have taken the biggest hit. They wonder if a key player might be on the brink, perhaps remembering past contagion events.
Experts I spoke with after the October crash confirmed that losses touched everyone. Traders, market makers (firms that provide liquidity), and even centralized exchanges felt the sting. The sheer amount of open interest in crypto markets before the pullback was a big factor, they said.
So, it wasn’t surprising that some online chatter started to pick up. One X user, WhalePump Reborn, with a following of about 13,000, put out a claim. They suggested Wintermute was affected by Binance’s ADL mechanism (a system that liquidates profitable traders to cover losses from bankrupt accounts).
The rumor went further. WhalePump Reborn claimed Wintermute had asked Binance for reimbursement, but Binance disagreed with the amounts requested. It painted a picture of a brewing dispute.
Gaevoy, however, didn’t mince words. He responded directly to WhalePump’s thread. He called the accusation “complete bullshit.”
That’s a pretty direct statement, isn’t it? It leaves little room for misinterpretation about his feelings on the rumor. He even recirculated an older post from October 11, stating Wintermute had survived what he called the “largest liquidation event in crypto history.”
A Closer Look at the Aftermath
Still, things aren’t always as simple as a single tweet. In a late October episode of The Block’s “Big Brain” podcast, Gaevoy did offer some interesting insights. He mentioned that some of Wintermute’s liquidated positions were “very strange.”
He even described them as happening at a “completely ridiculous price.” This suggests there might have been some unusual market dynamics at play, even if it didn’t lead to a lawsuit.
Binance, for its part, moved quickly to address the fallout from the crash. The exchange paid out $283 million in compensation to some traders. This was after USDe, BNSOL, and WBETH depegged on its platform, causing losses for users.
Beyond that, Binance launched a larger $400 million initiative. This fund aimed to refund users and restore market confidence. A portion of that, $100 million, was set aside for low-interest loans. These loans were meant to help institutional users get back on their feet and restart their trading.
It remains unclear whether Wintermute received any reimbursement from Binance through these programs. Gaevoy’s public stance has been one of resilience. He noted on the Saturday following the liquidation event that Wintermute was “perfectly fine.”
Wintermute is a significant player in the crypto space. It stands as one of Binance’s largest liquidity providers. This means they help ensure there’s enough crypto available for people to buy and sell easily on the exchange.
Interestingly, Wintermute reportedly moved $700 million onto Binance just hours before the crash. Gaevoy later mentioned on the “Big Brain” podcast that the firm withdrew “roughly the same amount” after the event. This kind of capital movement is typical for a market maker, but the timing certainly catches the eye.
Connections and Context
It’s always worth remembering the connections within this industry. Evgeny Gaevoy, Wintermute’s founder, previously served on The Block’s board of directors. That was from April 2023 to early November 2023. He also remains a minority shareholder in The Block.
The Block itself has its own set of relationships. As of November 2023, Foresight Ventures is a majority investor. Foresight Ventures also invests in other companies across the crypto space. Crypto exchange Bitget, for example, is an anchor LP (limited partner) for Foresight Ventures.
These details don’t change the facts of the market crash or Gaevoy’s denial. But they do offer a glimpse into the interconnected nature of the crypto world. Everyone seems to know everyone, and capital flows in many directions.
In the end, the rumor of a lawsuit between Wintermute and Binance appears to be just that: a rumor. Gaevoy has been quite firm in his denial. It seems the market, for now, can breathe a little easier on that front.
